S&P Dow Jones has again added to its rapidly expanding suite of indices with the launch of the S&P Nordic Low Volatility Index, an index tracking the performance of the 30 least volatile stocks in the S&P Nordic Broad Market Index (BMI). The new index further enhances the index provider’s existing low-volatility line-up and reflects continued investor interest in low-volatile equity strategies.
Vanguard has expanded its European suite of low-cost exchange-traded funds (ETFs) with the launch of four new funds on the London Stock Exchange. The new ETFs complement the firm’s existing London-listed line-up, which debuted in May 2012. Axel Lomholt, Vanguard’s Head of International Product Development, said: “In the US, Vanguard has been very successful in this area, gathering nearly $290 billion of assets since its first ETF launch in 2001. We think that the same low-cost, straightforward approach will prove equally popular in Europe”.
By David Stevenson – Why are so few investors currently buying into consumer staples sector ETFs? I realise that this isn’t exactly one of those raging questions that ranks up there alongside “should we dump Europe?” and “why, oh, why are most of the singers on The Voice so bloody awful?”, but for investors I think the question really, really matters. To understand why I’m so nonplussed, let’s rewind the investment debate and establish some basic principles. The first and most basic principle is that investors worldwide are fearful about macro risk.
Asset class performance has been very mixed so far this year with currency volatility re-awakened and softening global economic data suggesting more difficult times ahead, according to Stephen Cohen, Head of iShares EMEA Investment Strategy & Insight. So what can investors do? Cohen proposes four strategies: overweighting defensive equities and equity income; using developed market equities to access emerging markets; playing Japan via a currency-hedged solution; and mitigating interest rate risk in fixed income and looking at local currency emerging markets debt.
The Bank of Japan (BoJ) has approved a massive multi-asset purchase programme, including the purchase of billions of dollars worth of exchange-traded funds (ETFs), designed to stimulate the Japanese economy. The BoJ will purchase Topix and Nikkei 225 ETFs so that the amount outstanding will increase at an annual pace of 1 trillion yen – approximately $10.5 billion per year.
EDHEC-Risk Institute has published the results of the Amundi-sponsored EDHEC European ETF Survey 2012. Among the key findings is that ETFs remain the favourite choice of investors for passive investment. Commenting on the findings, Valérie Baudson, Managing Director of Amundi ETF, said: “Despite the growing maturity of the ETF market, this year’s survey has shown again that the level of satisfaction towards ETFs remains extremely high and that the vast majority of investors plan to increase their usage.”
NYSE Euronext Indices and Bloomberg New Energy Finance have re-branded their family of clean energy indices to better represent the involvement of both NYSE and Bloomberg. The family is now known as NYSE Bloomberg Clean Energy Indexes. The indices were launched in April last year and are based on Bloomberg New Energy Finance’s database of organisations involved in clean energy and related sectors. The database includes more than 1,000 listed companies with at least 10% or more of their activity in clean energy.
Leveraged exchange-traded funds (ETFs), which provide magnified exposure to various financial markets, have provided everyday investors with powerful hedging and speculative trading instruments that were once the reserve of institutional investors. These instruments typically provide two or three-times exposure – long or short – to a specific index tracking equities, bonds, commodities or currencies.
China’s leaders have recognised the problems associated with the current export-led economy and are implementing measures to boost consumer consumption. Wen Jiabao, the country’s premier, vowed: “We will work hard to expand consumer demand…We will improve policies that encourage consumption.” Chinese consumer companies look best placed to grab the largest share of consumption growth. Investors looking to target this sector can do so via the db X-trackers CSI 300 Consumer Discretionary UCITS ETF and the Global X China Consumer ETF.
Market Vectors Index Solutions has introduced the Market Vectors US Treasury-Hedged High Yield Bond Index, a new bond strategy index reflecting the performance of a long position in high-yield corporate bonds and a short position in US Treasuries. The index comes at a time when investors are becoming increasingly conscious of the potential negative impact of interest rate rises on bond returns but are nonetheless still keen to exploit the enhanced income associated with high-yield debt.